Anticipating when players will lose interest is an essential part of recording revenue in the mobile-game industry, where the sale of “virtual durable goods,” such as cows and tractors in “FarmVille” or cannons and dark barracks in “Clash of Clans” is a major source of income. Read More »

The U.S. Securities and Exchange Commission is taking a closer look at the big user numbers technology companies are reporting in their IPO documents, hoping to avoid a repeat of the late 1990s when companies touted “eyeball” figures that were not necessarily linked to revenue. Read More »

The performance of the largest technology IPOs in 2011 may give Zynga management pause as the online gaming company prepares for its public offering later this month. According to Dealogic, seven of the 10 largest tech IPOs this year have seen their share prices plummet after shares started trading publicly, down on average 28% below their offer price. This kind of performance might cause investors to reconsider jumping in, potentially depressing the amount of cash Zynga can raise. Read More »

Internet gaming company Zynga Inc. raised a $1 billion credit line in July that “could give the company a financial cushion if continued market turbulence forces it to delay an initial public offering,” reported the WSJ’s Nick Wingfield. The desire for a safety net is well warranted. Stock market gyrations caused six IPOs in the U.S. to be delisted, withdrawn, or postponed in the first two days of this week alone. Read More »

Private market trading has pushed online game maker Zynga Inc’s valuation as high as $17.5 billion ahead of its IPO, compared to bigger gaming rival Electronic Arts, which has a market capitalization around $8 billion. The two companies’ market valuations may represent a shift in market structure as much as changes in the gaming industry. Read More »

So how exactly does a company that sells “virtual goods” in online games book its revenue?

We took a look inside the S-1 of Zynga, which makes games like FarmVille and Mafia Wars for social networking platforms like Facebook, and found a system classifying game items it sells to players as either “consumable” or “durable” goods. The former category is for goods that players can immediately use, like energy in the game CityVille, and can be accounted for as they’re consumed. The latter category is where things get a bit more complicated. Read More »

Zynga finally filed to go public today. But as this post by All Things D’s Tricia Duryee notes, the fact that the online gaming company makes its money by selling purple cows raises some interesting accounting questions. Read More »